Latest news with #Rs8.2
Express Tribune
21 hours ago
- Business
- Express Tribune
Inflation falls sharply, undercuts tight policy
Listen to article The government has surpassed its annual inflation target, which increased at a pace of 4.5% in the last fiscal year, mainly because of a slump in food prices, reinforcing the widely held independent view that the extent of monetary tightening was excessive and unwarranted. The Pakistan Bureau of Statistics (PBS) reported on Tuesday that the average increase in the cost of a basket of essential goods and services stood at 4.5% for FY2024-25 — well below the official target of 12% and far lower than initial projections by the International Monetary Fund (IMF) and other multilateral lenders. The IMF had initially forecast inflation at 15%, later revising it downwards. However, these elevated projections pressured the central bank to maintain double-digit interest rates, which ultimately hurt economic growth. The central bank has kept the interest rates at 11%, which are far higher than the headline and average inflation rates for the just ended fiscal year. This solely benefited the commercial banks at the expense of businesses and the federal government that gives away around half of the total budget in interest payments. The current approach of maintaining 11% rates, while allocating Rs7.2 trillion for domestic debt servicing, ensures continued economic stagnation, whereas regional competitors strengthen their industrial bases and export capabilities, according to the Economic Policy and Business Development (EPBD). The government has allocated a total Rs8.2 trillion for debt servicing, which is equal to 46% of the approved budget for this fiscal year, which began on Tuesday. The EPBD, an independent think tank, stated last week that the Rs7.2 trillion was going to the banking sector as guaranteed profits. With 59% of government debt in floating-rate instruments, reducing policy rates from 11% to 6% would generate immediate savings on the majority of debt stock, it added. It further said that the government compounded this burden by issuing Rs2 trillion in fixed Pakistan Investment Bonds at peak rates of 22% during the last two fiscal years and locked in excessive costs for banks' benefit, according to the statement. The think tank stated that by reducing the interest rates to 6% because of substantial reduction in the inflation rates, the government can immediately save Rs3 trillion in the debt cost. Even a small portion of these savings can help generate jobs by lowering the cost of doing business, according to EPBD. The average inflation rate in rural areas remained at 3.3%, while it ended at 5.3% in the urban centres, according to the PBS. The annual inflation rate also eased to 3.2% in June, which was in line with the Finance Ministry's projection for the month. In its monthly economic outlook report, the ministry reported this week that the inflation was projected to remain between 3-4% in June. With the fresh inflation rate, the gap between headline inflation and the key policy rate of the SBP has widened to 7.8%. The Monetary Policy Committee last month left the policy rate unchanged 11% despite a persistent decline in inflation. For the new fiscal year, the government has approved a 7.5% inflation target, which still provides further room for reducing the interest rates. Core inflation, calculated after excluding energy and food items, has eased both in cities and towns. The rate slowed down to 6.9% in cities and 8.6% in rural areas, said the PBS. Urban annual inflation eased to 3% and it slightly accelerated to 3.6% in rural areas last month. The PBS reports inflation data from 35 cities and covers 356 consumer items. In rural areas, it covers 27 centres and 244 consumer items. The data showed that food prices again decelerated after picking up pace a month earlier. The food inflation rate in cities slowed down 4.2% but slightly increased to 2.4% in rural areas. The government has failed to fulfil its promise of keeping the prices of sugar in check, thanks to the decision of allowing exports last year. Sugar prices jumped one-fourth last month compared to a year ago, according to the PBS. The increase in sugar prices is also contributing to higher tax collection, as the government has linked the 18% sales tax on sugar with the fortnightly inflation rate. Eggs became expensive by 25%, milk powder 22% and meat 11%. Onion prices were still lower by 56% compared to a year ago, followed by 23% reduction in prices of tomatoes and wheat 17%. Electricity charges were lower by 30% last month, compared to a year, petrol was still 2% cheaper than last year despite increasing taxes.
Express Tribune
6 days ago
- Business
- Express Tribune
NA passes Finance Bill with Rs463b new taxes
Listen to article The National Assembly on Thursday approved the Rs17.6 trillion worth budget along with Rs463 billion new taxes, bringing the digital economy under the purview of tax laws but almost nullified the single largest enforcement measure to ban economic transactions by ineligible persons. The National Assembly approved the second budget of the government of Prime Minister Shehbaz Sharif with a comfortable majority. During a voting on one clause, the coalition government mustered the support of 201 Members of the National Assembly as against 57 votes of the opposition parties. It was also the second budget presented by Minister for Finance Muhammad Aurangzeb in the National Assembly. With the approval of the assembly and subsequent assent by President Asif Ali Zardari, the Finance Act 2025 will come into effect from Tuesday. The National Assembly approved a Rs17.6 trillion budget for the fiscal year 2025-26, making the single largest allocation of Rs8.2 trillion for the interest payments. The defense spending would consume Rs2.55 trillion, the single largest expense in the budget, excluding expenses on the armed forces development programme and military pensions. The subsidies are the third biggest head with over Rs1.1 trillion allocation, followed by over Rs1 trillion for pensions, Rs1 trillion for development spending and another Rs917 billion for running the civil government. The National Assembly also approved to effectively exempt the income of Beaconhouse National University, Federal Ziauddin University, Punjab Police Welfare Organization and Army Officers Benevolent Fund and Bereaved Family Scheme from the tax. Tax on the contracts of the National Logistic Cell (NLC) has been set at a minimum of 3% of the gross value of the contracts. But if the total liability is more than the collected tax, the NLC will be charged at the normal income tax rate of 29%, according to the bill approved by the National Assembly. Arrest powers for the Federal Board of Revenue will stay in the law but with inclusion of some more safeguards, as stated by both Pakistan People's Party Bilawal Bhutto Zardari and Deputy Prime Minister Ishaq Dar. This is the best budget that any government can give in challenging circumstances, said the chairman FBR while talking to The Express Tribune. He said some fundamental principles have been set in the budget, including creating deterrence against frauds and giving a framework for registration of taxpayers for the sales tax purposes. To discourage use of cash, the chairman FBR said that the National Assembly has approved not to give expenses' allowance in case the value of the cash payment is over Rs200,000. Likewise, the input tax adjustment has also been disallowed on cash payments of supplies beyond a certain threshold, he added. Langrial said that the foreign vendors and the digital marketplaces have also been brought under the ambit of the tax laws. The National Assembly approved Rs463 billion worth of new tax measures, including Rs36 billion that were introduced after the presentation of the budget in the National Assembly on June 12th. The biggest measures in the budget were imposing taxes, both on sales and income, on the online platforms, e-commerce, cash-on-delivery by couriers, and tax on digital services like streaming. A new climate support levy Rs2.5 per liter levy is imposed on every liter of petrol and diesel. Another new tax of 1% to 3% has been imposed on conventional fuel-based cars to subsidize electric vehicles. The pensioners have been brought in the tax net, but only annual pensions of above Rs10 million are taxed at the rate of 5%. The fourth new tax is Rs10 federal excise duty on every one-day-old chick sold in the country. The government had claimed collecting Rs389 billion in the next fiscal year on the back of the single largest enforcement measure of banning the economic transactions by the ineligible persons. The Finance Minister had warned in his post-budget press conference that if the Parliament did not pass this law then up to Rs500 billion mini-budget would have to be introduced. The government on the "instructions" by the Prime Minister has tamed down these stringent powers. The National Assembly approved that the ban on buying a residential plot or houses by an ineligible person will apply only if the value of the property is over Rs50 million. This limit is over Rs100 million for commercial plots or properties. The ineligible persons can still buy up to Rs7 million cars. The chairman FBR Rashid Langrial said that in the first step, the government has established the principle of ineligible and the limits can be revised in the future. Early this year, the FBR chairman had informed the National Assembly Standing Committee on Finance that due to almost no capacity of the FBR to audit the tax statements, the rate of success in inquiring the people about the source after making these purchases was only 3.7%. The ineligibility condition will apply only if the value of cash withdrawal from the bank account is more than Rs100 million per annum. The ineligibility condition on stock market investment would be applicable, if the cumulative investment in a year is more than Rs50 million. However, the ineligible persons cannot maintain saving accounts in the banks. The finance minister also announced to exempt a residential property owner from payment of up to 6.5% withholding tax at the time of sale, if the property is sold after retaining it for at least 15 years. The National Assembly also approved to increase the income tax rate on the income derived from the debt portion of mutual funds issued to companies from 25% to 29%. It also approved to increase the income tax rate on profit earned from giving loans to the government from 15% to 20%. The National Assembly slapped a Federal Excise Duty (FED) of Rs10 per day-old chick. The government has estimated that about 1.5 billion chicks are produced every year and it will collect Rs15 billion by taxing a product that is a common diet of the poor and the rich. The National Assembly approved 10% sales tax on the import of solar panels. Tax Fraud arrest powers The National Assembly approved to give the arrest powers to the FBR in the sales tax fraud cases after multiple rounds of negotiations between the PPP and the PML-N. According to the law passed by the National Assembly, a person cannot be arrested at the inquiry stage of the sales tax fraud. In case of arrest, the accused will have the right to get bail from the court. These two new safeguards were added after the latest round of negotiations between the PPP and the PML-N on Wednesday. Chairperson of the Pakistan Peoples Party Bilawal Bhutto Zardari said on Thursday that his party was wholeheartedly supporting the federal budget after the government accepted its demands to exempt income tax on salaried individuals earning Rs100,000 and reduce sales tax on solar panels. However, contrary to Bilawal's claim, the government has not exempted the Rs1.2 million salaried incomes from the tax. The rate of income tax on up to Rs1.2 million annual incomes will be 1%, compared to 5% before the budget, according to the bill approved by the National Assembly. The income tax on annual income of Rs1.2 million has been exempted on the PPP demand, said Bilawal Bhutto while speaking at the floor of the house. Bilawal further said that the government also agreed to the PPP's reservations about giving arrest powers to the FBR. The government agreed that the arrest powers will only be limited to sales tax forgery and at the inquiry stage no arrest will be made, said Bilawal. The tax fraud will also be a bailable offense, said the PPP chairperson while announcing his party's agreement with the government on the arrest powers. The Express Tribune reported on Thursday that the PPP had refused to vote on the bill due to a proposal to give arrest powers to the FBR. However, Deputy Prime Minister Ishaq Dar convinced PPP to withdraw the objections. Dar also told The Express Tribune that new safeguards have been added in the Finance Act to address the PPP's concerns. The PPP chairman said that the government also increased the BISP budget by 20% on the demand of the PPP. The government has allocated Rs716 billion for the BISP for the next fiscal year.
Business Recorder
25-06-2025
- Sport
- Business Recorder
PSB disburses Rs8.2m in cash awards to athletes, Rs63.9m in grants to sports federations
The Pakistan Sports Board (PSB) on Wednesday distributed Rs8.2 million in cash awards to 36 national athletes and disbursed Rs63.9 million in grants to 22 sports federations, in a major move to promote sports development across the country. The ceremony was held in Islamabad to honour national athletes who have earned international recognition through their recent performances. Advisor to the Prime Minister on Inter-Provincial Coordination, Rana Sanaullah Khan, was the chief guest at the event, accompanied by Federal Secretary Mohiuddin Wani and PSB Director General Muhammad Yasir Pirzada. PSB takes action against unauthorised bodybuilding federation Javelin thrower Arshad Nadeem received the highest individual award of Rs2 million for winning a gold medal, while his coach Salman Iqbal Butt was awarded Rs600,000. In snooker, Ahsan Ramzan and Muhammad Asif were awarded Rs500,000 each for their bronze and gold medal achievements, respectively. Muhammad Naseem Akhtar received Rs100,000 for securing a bronze. In table tennis, Abdal Muhammad Khan earned Rs250,000 for a silver medal in the U-15 singles, while he and Zunaira Khan received Rs187,500 each for a silver medal in mixed doubles. Team event players Abdal, Noor Khan, Taha Bilal, Abu Huraira, Attaul Manan, and Moosa Asif received Rs75,000 each. Special Olympics athletes were also recognised for their performance at the World Winter Games. PSB welcomes FIFA school football program invitation Abdul Saboor Ahmad was awarded Rs250,000 for a gold and Rs100,000 for a bronze. Muhammad Afaq Khan, Muhammad Moazzam Iqbal, and Muneeb ur Rehman each received Rs250,000 for their gold medals, while relay team members were given Rs150,000 each. In addition to the cash awards, the PSB distributed Rs63.9 million in financial grants to 22 national sports federations under annual and special categories. These included: Athletics Federation of Pakistan: Rs10 million National Rifle Association: Rs7 million Pakistan Handball Federation: Rs5 million Pakistan Squash Federation: Rs5 million Pakistan Volleyball Federation: Rs5 million Pakistan Wrestling Federation: Rs3 million Pakistan Karate Federation: Rs3 million Pakistan Ju-Jitsu Federation: Rs2 million Winter Sports Federation Pakistan: Rs2 million Pakistan Swimming Federation: Rs2.25 million Pakistan Table Tennis Federation: Rs2.25 million Pakistan Bodybuilding Federation: Rs2.5 million Pakistan Tenpin Bowling Federation: Rs2.5 million Pakistan Judo Federation: Rs1 million Pakistan Sailing Federation: Rs1 million Pakistan Wushu Federation: Rs1 million Pakistan Rugby Union: Rs1.1 million Pakistan Badminton Federation: Rs1.1 million Pakistan Taekwondo Federation: Rs1.1 million Pakistan Tennis Federation: Rs1 million Alpine Club of Pakistan: Rs2.1 million Pakistan Kabaddi Federation: Rs3 million Of the total disbursement, Rs32.9 million were allocated as annual grants, while Rs31 million were provided under the special grant category. The PSB said the financial support reflects the government's continued commitment to strengthening the country's sports infrastructure and incentivising high-performing athletes across disciplines.
Express Tribune
23-06-2025
- Politics
- Express Tribune
Pakistani airspace to remain closed for Indian aircraft until July 23
Listen to article Pakistan has extended its ban on Indian aircraft using its airspace for another month. The ban was initially imposed on April 24 following India's unilateral suspension of the Indus Waters Treaty. According to a Notice to Airmen (NOTAM) issued by the Pakistan Airports Authority on Monday, the country's airspace will remain closed to all Indian commercial and military aircraft until July 23, 2025. The restriction applies to all Indian-registered aircraft, including those on lease, and covers both passenger and military planes. 'The ban has been extended for one month. Indian aircraft, including chartered and leased, are not permitted to enter Pakistani airspace,' the NOTAM stated. The ban has resulted in significant operational and financial setbacks for Indian carriers. Aviation insiders estimate the losses to India at over Rs8.2 billion due to rerouting costs, longer flight durations and suspended cargo operations. As the ban continues, industry experts warn that Indian carriers might soon be compelled to cut routes or hike fares, passing the burden onto passengers, unless diplomatic channels find a way to clear the air. Pakistan initiated airspace closure as tensions flared between Pakistan and India following an April 22 attack in Pahalgam, Indian Illegally Occupied Jammu and Kashmir (IIOJK), which left 26 civilians dead. India blamed Pakistan-based elements without presenting any evidence, and Islamabad rejected the allegations. In response, India closed the Wagah border, revoked visas, and suspended the Indus Waters Treaty—moves Pakistan called an 'act of war.' The conflict intensified with India's missile attacks and drone incursions as it launched its Operation Sindoor. On May 10, Pakistan launched Operation Bunyanum Marsoos in retaliation, and announced it had downed five Indian jets—including Rafales—and intercepted 77 Israeli-made Harop drones. Following diplomatic intervention led by Washington, both sides agreed to halt military activity across land, air, and sea.
Express Tribune
04-06-2025
- Business
- Express Tribune
Pak airspace ban costs Air India Rs8.2b
Pakistan Air Force J-10C fighter jets perform at a rehearsal ahead of Pakistan's national day parade in Islamabad on March 21, 2024. (Photo by Aamir QURESHI / AFP via Getty Images) AAMIR QURESHI As the airspace ban Pakistan slapped on Indian carriers drags on for forty days, the cost for Air India is turning from heavy to near-unsustainable, aviation sources said on Wednesday. The Indian national carrier has already taken a hit of over Rs8.2 billion since the closure began. According to well-placed aviation insiders, Air India is bleeding approximately Rs200 million each day due to longer alternate routes, increased fuel consumption and delays triggered by the airspace detour. In a sign of rising frustration, Air India's Chief Executive Officer Campbell Wilson has formally written to the Indian government, highlighting the scale of financial damage. In the letter, Wilson reportedly warned that continued restrictions could render airline operations unsustainable if not addressed soon. According to The Economic Times, an internal presentation showed that Air India had, late last year, set a target to become profitable by FY 27. However, the closure of Pakistani airspace for Indian carriers is likely to delay that. "It will still take a little bit more time to achieve what we want to achieve, but it was a five-year project in the beginning," Wilson said in the interview to the Economic Times, referring to the five-year transformation plan 'Vihaan' announced in September 2022. "The closure of Pakistani airspace, which started on April 24, has forced Air India's flights to North America to take detours and stop in Vienna or Copenhagen to refuel, leading to increased expenses," the report noted. "It's not insignificant, but as long as it covers the cost of operation, we will continue to operate," Wilson said. "We don't know the extent to which the bottom line is going to be affected. We will try to minimise the effect." The CEO's concerns are not limited to Air India alone. Other Indian carriers have also reportedly suffered billions of rupees in cumulative losses, though precise estimates remain undisclosed. "This isn't just turbulence, it's a full-blown storm for Indian aviation," a senior aviation official remarked, noting that the 40-day closure has upended flight logistics, increased operational costs, and complicated international schedules for Indian carriers. The airspace restrictions, which came into effect in the wake of heightened diplomatic tensions, have now completed 40 days, with no breakthrough in sight. For airlines forced to circumvent Pakistani airspace, the sky is not only the limit but also a costly detour. As the ban continues, industry experts warn that Indian carriers might soon be compelled to cut routes or hike fares, passing the burden onto passengers, unless diplomatic channels find a way to clear the air.
